PatsFanInVa

I've deleted this twice because I've screwed it up twice in the poll itself. I am hoping I can get this right. Below is the background once more:

Looking at GDP data from 1950-2010, expressed in constant dollars, and looking back in 30 year chunks, you get a multiplier effect of various sizes. From 1950-1979, the economy grew by a factor of 2.9. From 1981 to 2010, the economy grew by a factor of 2.2 (the lowest multiplier.)

This means that the GDP in 2010 is worth 2.2 times what it was worth in 1981, in constant dollars. I plotted 1980-2009, 1979-2008, and so on all the way back to 1979, the first year it's possible to do this with the available data.

There is a general downward trend in these 30 year chunks, though the multiplier declined really steeply from about 2004-2010. 2009 and 2010 yield almost identical multipliers, the lowest in the range. The highest was the 1950-1979 result of about 2.9. A multiplier of 2.5 is about average.

The question is: what is the multiplier will we grow by between 2010 and 2029?

PatsFanInVa

By the way, scroll down here to the data and copy/paste into excel if you want to drill down to numbers (assuming this links to the exact chart I pulled up, GDP by year in constant 2005 dollars.)

US Gross Domestic Product GDP History United States 1950-2010 - Federal State Local Data

PatriotsReign

I repeat the post I made last night....

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PatsFanInVa

But you have no guess as to the answer to the poll?

PatriotsReign

As I stated in my original post, it is nearly impossible to predict US GDP growth moving forward because no one knows what the long-term affects of this recession/depression will be.

If you read my original post, I believe we'll be fortunate if GDP grows 50% (.5 times) by 2029.

But no one can confidently answer your question. The best the most respected economists can do is a "stab-in-the-dark".

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PatsFanInVa

Interesting - but I'd say you have to project in order to have an opinion on public policy. For example, the lower our growth assumption, the more insurmountable debt appears to be (I don't want to link this too closely to the thread next door, only because here I'm feeling a little more wool-gathery, a little more reasoned, a little less combative, I suppose.)

But think about it. If our current real economy is stagnant, only our obligations mount, and there is no way to make it over the hump on a range of issues.

If over 30 years we nearly triple our economy, as happened between 1950 and 1979, all sorts of things are possible.

If "nobody can predict" or even guess, well then, we have no way to have our many discussions about the economy. We definitely need to at least guess "how to grow," and we need to at least have access to the historical pattern. The data I looked at is in 30 year chunks, which smooths most impacts.

In that the most recent smoothing incorporates the drop off the cliff in 07-09, I think the 2.2 multiplier over the next 30 years is in fact a very low figure.

From your guess, it sounds as if you expect at least a couple more collapses like the 07-09 recession between now and when we measure 30 years from now (with the completed 2029 data). By historical standards, it will feel like one long depression with periods of adequacy, in your model (<50% growth over the next 30 years.) Again, that multiplier has been >double for every period we have data for.

I'm not saying you're wrong, I'm just saying that's where you are (with the caveat that "nobody can guess.")

PatriotsReign

2029 is only 17 years from now...

Regardless of whether we experience more recessions between now and '29, we do know we'll be fairly stagnant for another 5 years or so.

But you also have to factor in the fact we have a mature economy while many nations are emerging growth nations. The faster these countries grow, the more it affect our GDP. So we'd need to mathematically factor in what affect EG nations have upon our economy.



Using your rationale of the incredible growth our economy has had since the early 1950's, it's easy to see that there is no way we should have had any debt in 2000! Revenues should have grown faster than population growth...so why did we end up with so much debt?

You want to "invest" now...but why weren't we in a "save" mode prior to 2000? If one believes this country should invest during recessions, then it's logical that we should NOT have been "investing" during booms.

You can't have it both ways.

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patsfan13

The decline in avg GDP is a function of demographics + government policy. So it will depend on how bad our demographic situation get and whether or not we continue to expand government spending/regulation as a % of GDP. By government spending I mean all spending Federal, State and local government.

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wistahpatsfan

Growth is a tricky subject as we're damned if we do and we're damned if we don't. At least that's what I get from the premise of our need to eliminate the deficit by encouraging "growth".

I don't think that's necessarily necessary (yes, that's proper grammar...I checked) as I'm a firm believer in the limits of growth. As GDP goes, I assume we include non-productive "products" like financial advisors, transaction fees, and consulting. I suppose video game production and devices in cars that make them park themselves are important to the equation as well (I know that I really NEED to have a lighter with a Pats logo). Is that really "growth"?

Lost in the discussion of increasing growth for the sake of deficit reduction is the impact on the environment and biotic systems, the reduction of our overall health, inreased isolation of people, (except in the third-world manufacturing cities) and the constant distraction that this equation represents. The equation implies that we must continue to increase our population indefinitely. In order to support that open-ended population (and, more importantly, keep them sedate) we must continue to make crap and throw that crap out. The best way to do that is to make the crap fail soon enough. Durability is no longer the goal and quality of life becomes secondary. Both parents must work because everyone must go to college (another GDP component, I assume) and those who do better keep going if they want a job paying in the 6 figures so they can get the really good stuff...

Meanwhile, we need to make more gadgets that supposedly saves us time so we can work more, live further apart from each other, and buy those devices and vehicles so we can keep increasing the population and defending our stuff from those who don't have it but are told they need it. Our consumer-driven economy will meet a limit. It has to. The planet is not getting larger and we will soon be forced to find another place to live, but that won't be possible, because America doesn't trust science so schools and NASA are unfunded. We can't be on this path indefinitely and anyone who thinks so is a fool. This discussion, while important to some (and I mean no offense to them), is nothing more than whistling past the graveyard.

Rant over.

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PatriotsReign

Bingo wistah!!

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